OMG a flat for 7k!!! Yes £7,000….

Today I was just flicking through the auction catalogues when I came across a repossessed flat – didn’t look anything special. BUT what got me was the guide price – just £7,000 – yes £7,000!

So what do you get for £7,000?

Well here is the external:

And the internal:

Amazingly for just £7,000 you have a kitchen, a bathroom, carpets…and windows!!!!

Now I have seen cheap properties in my time – but this is seriously cheap! I mean this is not Bulgaria…although it is Washington, Tyne and Wear which is North East….but it’s still the UK!

So I’ve done some research on Rightmove, Zoopla and other property portals and I’ve discovered this flat was for sale with an estate agent before the auction with a price of £9,950.

So I deduce that it must be a festing ground of drug addicted crime ridden inbreds – and I check the Police Crime Website expecting to have my beliefs confirmed..BUT low and behold the level of crime and anti-social behaviour in this area is average for the UK! Although I note commentary on the site regarding the area:

“Washington Neighbourhood Policing Team has been running Operation Horizon for the past seven months which has provided extra police officers, community support officers and a dedicated anti social behaviour officer from Sunderland City Council…Overall crime in Washington continues to reduce and for the current year to date, we have achieved a reduction of almost 15% in reported crime.”

OK – so it would appear they have some issues…but they are tackling them and they are seeing a reduction in reported crime – that’s got to be a positive sign?

The ACORN classification for the neighbourhood profile says:

“Often, many of the people who live in this sort of postcode will be low income singles living in small rented flats….People have average educational qualifications. Their relatively routine jobs are in shops and offices, and there is some unemployment….Few people own a car, with those who do paying high insurance premiums. Most get about on foot, by bike, or public transport. The pub is a relatively popular place for eating, either at lunch-time or in the evening. Leisure interests tend to be football and betting on the horses. At home they might unwind by listening to music or reading a novel. There is a keen interest in self-improvement and education”

OK – so the type of people who live here may be single and poor – but at least they’re interested in improving themselves 🙂

Unbelievably I have also found a flat in the same block which has rented recently at £325pcm.

Now let’s just do the yield on this.

So if I buy this flat at £7,000 and I rent it for £325 pcm then the yield would be a mammoth: 55.7%!!!!

Hi sam, I’m fascinated to find out if this is indeed too good to be true- there’s GOT to be something up with it?! Maybe ask the neighbours of you do go up there- maybe someone died in it or something?! Might put off someone more local buying, might put off local renters too though! I’m very wary of buying anything in an area not known to me as it’s unknown territory, I know you buy all over though – how do you get over that mental block? Good blog :0) Claire

WOW! That’s so cheap. There’s got to be lots of reasons. Perhaps the building it’s in is about to have a million pounds worth of repairs on it, perhaps the lease needs extending, maybe the building is falling down!
Shockingly cheap.

There’s a lot of nasty stuff to stop people climbing in the external photo though.
What’s the area like on the police crime maps? (One of the greatest tools to appear in the last few months)

This sold for £10k at auction. I’m sure you could’ve bought it cheaper with the estate agent beforehand! I decided against this as it was so far away – and you know you are asking for trouble buying into a place like this.

Hi Sam,
I a developer for over 20 years, your article above is total rubbish, put the postcode/ full address up for this property?

Any idiot would buy it at a 55% yield if your figures are correct regardless of it being ”so far away”

If it was sellig for that yield it wouldn’t even make the open market, as no agent/auction house would value it at this price if that was true. If it went to auction at worst, even in today’s market (Apr 2011) it would sell for a 15% yield, even in a poor area.

You need to visit the property, check the (actual) facts before writing such bull as it just proves you know nothing about property, sorry don’t want to be rude, but that’s the facts.

Harry – I don’t mind you challenging my “bull”! The address: 102 Wellington Walk, Washington, Tyne and Wear, NE37 3EP, was sold in Barnard Marcus 16 March 2011 for 10k.

I agree you need to visit a property before buying it. This article was just showing initial desk research as I was so surprised to see such a cheap flat. Of course, I think there would be a very good reason why it is so cheap. However, I am also of the opinion that just because a property is a great yield, does not mean it is a great buy.